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Thriving in Self-Storage

Orange County
Thriving in Self-Storage
Find your niche and grow in it. That’s the takeaway from the growth trajectory of Ladera Ranch-based Strategic Storage Trust (SSTI). Once upon a time, the company had a broader CRE portfolio, but then it discovered value in those rows and rows of garage-like storage buildings and started to buy those and those alone.
Michael Schwartz
SSTI CEO Michael Schwartz tells us that the company got into a major acquisition mode just in time for the Panic of 2008. “When everybody else thought the world was going to end, we thought it was time to buy,” Michael says. (That must mean they are gearing up for big buys as we approach the Mayan apocalypse this winter.) “You might call us contrarians.” The buying continued intensely through 2011, when the REIT acquired $245M in self-storage assets for the year to bring its total portfolio to $550M: 91 properties in 17 states and Canada, which operate under the brand SmartShop. SSTI, which is a non-traded REIT, recently reported that its NAV is $10.79, or 79 cents above the current offering price.
SmartShop Self Storage
Now that the economy is recovering, property prices are going up and Michael tells us that buying will slow down for SSTI but not stop. He adds that Southern California has been a good place to go hunting for self-storage properties, and the company managed to pick some up in Orange County when it was in acquisition mode. More recently, though, prices have been going up and the competition more intense. “But that’s not going to stop us from looking,” he says. “There are still good deals out there.”